Residential Mortgages: the future for first time buyers

Tue 6 October 2020

At today’s Conservative Party Conference, the Prime Minister hinted at the possibility of bringing back the 95% mortgage for first time buyers. This is fantastic news, although he hasn’t given a time frame or guarantee. It is no secret that the COVID pandemic has made it much harder to get on the property ladder than it was this time last year; however, it is important to remember, it is harder but not impossible. So, before you go looking for the house of your dreams, check to see if you are eligible for a mortgage and take a few moments to see what steps you can take to improve your chances.

This is where a good mortgage Broker is worth their weight in gold by guiding you through the process and finding the most appropriate mortgage to achieve your aspirations.

Here, John Wilson, Director at Alnwick Financial Management, give you some First Time Buyer Top Tips.



BE PREPARED
Firstly, make sure you are on the Electoral Roll!

Keep up to date with all your payments like credit cards or mobile phone contracts. All lenders will typically want to see three months bank statements and pay slips, or for the self-employed, your last two years tax calculations and tax overviews.  

In a fast-moving property market, the better prepared you are and the quicker you can get your mortgage, the more attractive you are as a prospective buyer.

DECISION IN PRINCIPLE 
A Decision in Principle (DIP), or Mortgage in Principe (MIP) is a statement from a lender saying that they’ll lend a certain amount of money to you before you’ve finalised the purchase of your home. Your mortgage Broker can apply for a DIP on your behalf and this provides evidence of your borrowing ability to any prospective vendor. 

DEPOSIT
Pre-lockdown, most lenders were offering mortgages with just a 5-10% deposit, however, today the majority of the deals available require a minimum 15% deposit. Saving up regularly not only helps towards a deposit but gets you into the routine of budgeting! Most lenders will also accept a gifted deposit from family member.

Alnwick Financial Management have over a hundred and thirty years of experience and are here to set you on your way. If you are looking for advice or are about to make the move onto the property ladder, please get in touch by calling 01665 608155.